Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142701
Authors: 
Gelman, Maria
Jochem, Axel
Reitz, Stefan
Year of Publication: 
2016
Series/Report no.: 
Discussion Paper, Deutsche Bundesbank 23/2016
Abstract: 
The paper analyses the transmission of global financial shocks to individual member states of the European Monetary Union (EMU), in which monetary policy is delegated to the ECB and financial markets are fully integrated. Using a panel VAR model, we show that the asymmetric effects of global shocks on member states are partly offset by the uniform access of commercial banks to the Eurosystem's open market operations in conjunction with the redistribution of liquidity via the TARGET mechanism. However, an appropriate policy mix of sound public finances, solid financial regulation and targeted macroprudential measures is necessary in order to safeguard macroeconomic sustainability without needing to manage capital flows.
Subjects: 
monetary union
capital flows
global financial cycle
macroeconomic imbalances
JEL: 
F32
F36
F45
ISBN: 
978-3-95729-272-8
Document Type: 
Working Paper

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